In 2016, the Michigan League for Public Policy ran a celebratory blog about the Obama administration’s rule change that would have raised the annual salary threshold below which workers must be paid mandatory overtime pay when they work more than 40 hours in a week, from $23,700 to $50,400. Unfortunately, the rule never went into effect, having been held up in court following a challenge by Michigan’s then-Attorney General Bill Schuette and several other state AGs. Then-Gov. Rick Snyder was mum on the issue.
The League, in 2017, blogged about a report showing that from 2013 to 2015, approximately 130,000 Michigan workers experienced a minimum wage violation, with an average underpayment of $2.05 per hour (or $3,300 if for a full year). Examples of wage theft include paying workers less than the legal minimum wage, failing to pay overtime, requiring employees to work off-the-clock, denying workers their meal breaks, taking illegal paycheck deductions, and misclassifying employees as independent contractors to pay a wage lower than the legal minimum. Again, at that time, there seemed to be little appetite from the attorney general to put resources and energy into pursuing payroll fraud cases and from the governor to make policy changes to address the problem.
The good news is that times have changed with new state leadership. Michigan now has a governor and attorney general who stand up for the well-being of workers. In April of this year, Attorney General Dana Nessel announced the creation of a payroll fraud enforcement unit within the attorney general’s office to investigate worker claims of wage theft and employee misclassification. In August, she stood with lawmakers to endorse a bill package that would strengthen laws against payroll fraud and provide protections for whistleblowers that report it.
And, this past October, following heavy advocacy by the League and other organizations, Gov. Gretchen Whitmer announced that in the absence of the Trump administration’s adoption of the Obama overtime rule, her Department of Labor and Economic Opportunity will be raising Michigan’s overtime threshold higher than the national threshold. The level of the threshold will be decided after discussion with labor and business stakeholders around the state.
The governor’s announcement is important because, while President Donald Trump framed his increase of the overtime threshold to $36,000 as a win for workers, it actually leaves out approximately 200,000 Michigan workers that would have been covered under the Obama rule. Workers earning between $36,000 and $51,000 can be made to work 50, 60, or even more hours a week without receiving the time-and-a-half that 9 out of 10 Michiganians support as a right.
So, although the Thanksgiving holiday has come and gone, we can continue to express our gratitude that the executive branch in this state is committed to improving the lives and livelihood of Michigan workers. Let’s hope legislative leadership will follow suit.